`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

For the quarterly period ended October 2, 2004


[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

For the transition period from       to

                           Commission File No. 0-11201



                            Merrimac Industries, Inc.
        (Exact Name of Small Business Issuer as Specified in Its Charter)


           DELAWARE                                             22-1642321
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                             Identification No.)


                               41 FAIRFIELD PLACE
                         WEST CALDWELL, NEW JERSEY 07006
                    (Address of Principal Executive Offices)

                                 (973) 575-1300
                           (Issuer's Telephone Number)


Former name, former address and former fiscal year, if changed since last
report:   N/A
          ---

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.   Yes X       No  __
                                                               ---

As of November 12, 2004, there were 3,132,518 shares of Common Stock, par value
$0.01 per share, outstanding.

Transitional Small Business Disclosure Format (check one):  Yes __      No  X
                                                                           ---







                            MERRIMAC INDUSTRIES, INC.
                               41 Fairfield Place
                             West Caldwell, NJ 07006


                                      INDEX




                                                                            Page
PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements


          Consolidated Statements of Operations and Comprehensive Income
          (Loss) for the Three Months and Nine Months Ended October 2, 2004
          and September 27, 2003............................................   1

          Consolidated Balance Sheets as of October 2, 2004
          and January 3, 2004...............................................   2

          Consolidated Statement of Stockholders' Equity as of
          October 2, 2004....................................................  3

          Consolidated Statements of Cash Flows for the Nine
          Months Ended October 2, 2004 and September 27, 2003................  4

          Notes to Consolidated Financial Statements.........................  5

Item 2.   Management's Discussion and Analysis or
          Plan of Operation.................................................. 11

Item 3.   Controls and Procedures ........................................... 17

PART II.  OTHER INFORMATION


Item 6.   Exhibits .......................................................... 17

Signatures................................................................... 22









PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                            MERRIMAC INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                         AND COMPREHENSIVE INCOME (LOSS)
                                   (UNAUDITED)




                                                        Three Months Ended             Nine Months Ended
                                                      -----------------------        --------------------
                                                       October 2, September 27,     October 2,  September 27,
                                                         2004         2003             2004         2003
                                                      ----------   ----------       ----------   ----------

OPERATIONS
Net sales ...................................         $7,619,848   $6,356,685      $23,163,720   $19,480,926
                                                      ----------   ----------      -----------   -----------
Costs and expenses:
  Cost of sales .............................          4,457,772    4,155,523       13,345,322    12,273,743
  Selling, general and administrative .......          2,419,450    2,261,529        7,326,984     7,175,800
  Research and development ..................            359,166      316,452        1,326,789     1,340,437
  Restructuring charge.......................                  -       54,170                -       128,350
                                                      ----------   ----------       ----------    ----------
                                                       7,236,388    6,787,674       21,999,095    20,918,330
                                                      ----------   ----------       ----------    ----------

Operating income (loss)......................            383,460     (430,989)       1,164,625    (1,437,404)
Interest and other expense, net .............            (53,632)     (51,972)        (204,880)     (164,548)
Gain on disposition of assets................                  -       33,073                -       104,024
                                                      ----------   ----------       ----------    ----------
Income (loss) before income taxes............            329,828     (449,888)         959,745    (1,497,928)
Provision (benefit) for income taxes ........             15,000       34,508          (30,000)      (83,177)
                                                      ----------   ----------       ----------    -----------
Net income (loss)............................         $  314,828   $ (484,396)      $  989,745   $(1,414,751)
                                                      ==========   ==========       ==========   ===========

Net income (loss) per common share-basic.....         $      .10   $     (.16)      $      .32    $     (.45)
                                                      ==========   ==========       ==========    ==========
Net income (loss) per common share-diluted...         $      .10   $     (.16)      $      .31    $     (.45)
                                                      ==========   ==========       ==========    ==========


Weighted average number of shares outstanding:
  Basic .....................................          3,131,161    3,120,624        3,125,188     3,120,437
                                                      ==========   ==========       ==========    ==========
  Diluted....................................          3,154,785    3,120,624        3,151,165     3,120,437
                                                      ==========   ==========       ==========    ==========
COMPREHENSIVE INCOME (LOSS)

Net income (loss)............................         $  314,828   $ (484,396)      $  989,745   $(1,414,751)
Comprehensive income (loss):
  Foreign currency translation adjustment....            282,421      (21,049)         139,114       721,079
                                                      ----------   ----------       ----------   -----------
Comprehensive income (loss)..................         $  597,249   $ (505,445)      $1,128,859   $  (693,672)
                                                      ==========   ==========       ==========   ===========



See accompanying notes.




                                       1





                            MERRIMAC INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEETS



                                                                                         October 2,             January 3,
                                                                                            2004                  2004
                                                                                            ----                  ----
                                                                                        (UNAUDITED)             (AUDITED)

ASSETS

Current assets:
  Cash and cash equivalents......................................................        $ 2,899,213           $   452,633
  Accounts receivable, net.......................................................          5,615,750             6,299,258
  Income tax refunds receivable..................................................             93,228               135,520
  Inventories, net...............................................................          2,870,824             3,187,946
  Other current assets...........................................................            816,124               482,633
  Deferred tax assets............................................................            936,000               611,000
                                                                                         -----------           -----------

    Total current assets.........................................................         13,231,139            11,168,990
                                                                                         -----------           -----------

Property, plant and equipment....................................................         37,960,349            37,203,977
  Less accumulated depreciation and amortization.................................         22,297,035            19,982,378
                                                                                         -----------           -----------
Property, plant and equipment, net...............................................         15,663,314            17,221,599

Restricted cash..................................................................          1,500,000             1,500,000
Other assets.....................................................................            788,241               854,487
Deferred tax assets..............................................................                  -               221,000
Goodwill.........................................................................          3,198,607             3,122,563
                                                                                         -----------           -----------

    Total Assets.................................................................        $34,381,301           $34,088,639
                                                                                         ===========           ===========


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt..............................................        $   868,795           $   954,405
  Accounts payable...............................................................          1,294,648             1,239,925
  Accrued liabilities............................................................          2,105,602             1,711,875
  Customer deposits..............................................................            271,073               389,211
                                                                                          -----------           -----------

    Total current liabilities....................................................          4,540,118             4,295,416

Long-term debt, net of current portion...........................................          3,021,128             4,208,106
Deferred compensation............................................................             62,477                88,362
Deferred liabilities.............................................................             37,484                48,014
Deferred tax liabilities.........................................................            630,000               611,000
                                                                                         -----------           -----------

    Total liabilities............................................................          8,291,207             9,250,898
                                                                                         -----------           -----------

Commitments and contingencies


Stockholders' equity:
  Preferred stock, par value $.01 per share:
    Authorized: 1,000,000 shares
    No shares issued.............................................................                  -                     -
  Common stock, par value $.01 per share:
    Authorized: 20,000,000 shares
    Issued: 3,214,618 and 3,202,991 shares.......................................             32,146                32,030
  Additional paid-in capital.....................................................         18,754,292            18,686,914
  Retained earnings..............................................................          7,471,250             6,481,505
  Accumulated other comprehensive income.........................................            862,272               723,158
                                                                                         -----------           -----------

                                                                                          27,119,960            25,923,607
  Less 82,100 shares of treasury stock, at cost .................................           (573,866)             (573,866)
  Less loan to officer-stockholder...............................................           (456,000)             (512,000)
                                                                                         -----------           -----------

    Total stockholders' equity...................................................         26,090,094            24,837,741
                                                                                         -----------           -----------

    Total Liabilities and Stockholders' Equity...................................        $34,381,301           $34,088,639
                                                                                         ===========           ===========



See accompanying notes.



                                       2





                            MERRIMAC INDUSTRIES, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        NINE MONTHS ENDED OCTOBER 2, 2004
                                   (UNAUDITED)



                                                                       Accumulated
                                                Additional                Other                              Loan to
                               Common Stock     Paid-in      Retained  Comprehensive   Treasury  Stock       Officer-
                              Shares    Amount  Capital(A)   Earnings     Income      Shares      Amount   Stockholder     Total
                             ------------------------------------------------------------------------------------------------------

Balance, January 3, 2004.... 3,202,991 $32,030 $18,686,914  $6,481,505   $723,158     82,100    $(573,866)  $(512,000)  $24,837,741

Net income..................                                   989,745                                                      989,745
Stock Purchase Plan sales...     2,527      25      13,519                                                                   13,544
Exercise of options.........     9,100      91      53,859                                                                   53,950
Forgiveness of loan to
  Officer-stockholder.......                                                                                   56,000        56,000
Foreign currency translation                                              139,114                                           139,114
                             ------------------------------------------------------------------------------------------------------
Balance, October 2, 2004.... 3,214,618 $32,146 $18,754,292  $7,471,250   $862,272     82,100    $(573,866)  $(456,000)  $26,090,094
                             ======================================================================================================


(A)  Tax benefits associated with the exercise of employee stock options are
     recorded to additional paid-in capital when such benefits are realized.


See accompanying notes.


























                                       3




                            MERRIMAC INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)





                                                                                                 Nine Months Ended
                                                                                                ------------------
                                                                                        October 2,                September 27,
                                                                                          2004                        2003
                                                                                          ----                        ----

Cash flows from operating activities:
  Net income (loss) ...........................................................    $      989,745             $   (1,414,751)
  Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:
    Depreciation and amortization .............................................         2,418,956                  2,423,141
    Amortization of deferred financing costs...................................            37,442                    134,098
    Amortization of deferred income ...........................................                 -                    (21,822)
    Gain on disposition of assets..............................................                 -                   (104,024)
    Deferred and other compensation ...........................................            67,364                     69,800
    Deferred tax benefit.......................................................           (79,968)                  (122,546)

    Changes in operating assets and liabilities:
     Accounts receivable ......................................................           700,126                 (1,562,501)
     Income tax refunds receivable ............................................            44,178                    257,776
     Inventories ..............................................................           320,488                    447,679
     Other current assets .....................................................          (332,190)                  (174,785)
     Other assets .............................................................            28,804                     14,172
     Accounts payable .........................................................            59,653                   (445,014)
     Accrued liabilities ......................................................           385,733                     90,304
     Customer deposits.........................................................          (118,138)                   136,655
     Income taxes payable .....................................................                 -                        806
     Deferred compensation ....................................................           (32,749)                   (33,232)
     Other liabilities ........................................................           (10,530)                    67,107
                                                                                   --------------             --------------

Net cash provided by (used in) operating activities ...........................         4,478,914                   (237,137)
                                                                                   --------------             --------------

Cash flows from investing activities:
  Purchase of capital assets ..................................................          (847,494)                  (964,518)
  Proceeds from termination of lease...........................................                 -                    168,558
                                                                                   --------------             --------------

Net cash used in investing activities .........................................          (847,494)                  (795,960)
                                                                                   --------------             --------------

Cash flows from financing activities:
  Repayment of borrowings .....................................................        (1,276,555)                  (609,515)
  Restricted cash..............................................................                 -                 (1,500,000)
  Proceeds from the exercise of stock options..................................            53,950                      7,763
  Proceeds from Stock Purchase Plan sales......................................            13,544                          -
                                                                                   --------------             --------------

Net cash used in financing activities .........................................        (1,209,061)                (2,101,752)
                                                                                   --------------             --------------

Effect of exchange rate changes ...............................................            24,221                    80,983
                                                                                   --------------             --------------

Net increase (decrease) in cash and cash equivalents ..........................         2,446,580                 (3,053,866)
Cash and cash equivalents at beginning of year ................................           452,633                  3,610,798
                                                                                   --------------             --------------

Cash and cash equivalents at end of period ....................................    $    2,899,213             $      556,932
                                                                                   ==============             ==============

Supplemental disclosures of cash flow information:

 Cash paid during the period for:

    Income taxes ..............................................................    $       60,185             $       73,551
                                                                                   ==============             ==============
    Interest on credit facilities..............................................    $      209,590             $      204,429
                                                                                   ==============             ==============
 Non-cash activities-
    Unpaid purchases of capital assets ........................................    $      214,000             $       85,000
                                                                                   ==============             ==============
 Supplemental disclosure of non-cash financing activity
    Note payable for insurance premiums                                            $            -             $      192,396
                                                                                   ==============             ==============




See accompanying notes.



                                       4






                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-QSB and therefore do not include
all information and footnote disclosures otherwise required by generally
accepted accounting principles for a full fiscal year. The financial statements
do, however, reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of the financial position of the Company as of
October 2, 2004 and its results of operations and cash flows for the periods
presented. Results of operations of interim periods are not necessarily
indicative of results for a full year. These financial statements should be read
in conjunction with the audited consolidated financial statements in the
Company's Annual Report on Form 10-KSB for the year ended January 3, 2004.

Certain prior year amounts have been reclassified to conform to the current
presentation.

2. CONTRACT REVENUE RECOGNITION

Contract revenue and related costs on fixed-price and cost-reimbursement
contracts that require customization of products to customer specifications are
recorded when title transfers to the customer, which is generally on the date of
shipment. Prior to shipment, manufacturing costs incurred on such contracts are
recorded as work-in-process inventory. Anticipated losses on contracts are
charged to operations when identified. Revenue related to non-recurring
engineering charges is generally recognized upon shipment of the initial units
produced or based upon contractually established stages of completion. The cost
rates utilized for cost-reimbursement contracts are subject to review by third
parties and can be revised, which can result in additions to or reductions from
revenue. Revisions which result in reductions to revenue are recognized in the
period that the rates are reviewed and finalized; additions to revenue are
recognized in the period that the rates are reviewed, finalized, accepted by the
customer, and collectability from the customer is assured.

3. ACCOUNTING PERIOD

The Company's fiscal year is the 52-53 week period ending on the Saturday
closest to December 31. The Company has quarterly dates that correspond with the
Saturday closest to the last day of each calendar quarter and each quarter
consists of 13 weeks in a 52-week year. Periodically, the additional week to
make a 53-week year (fiscal year 2003 was the last and fiscal year 2008 will be
the next) is added to the fourth quarter, making such quarter consist of 14
weeks.

4. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) includes all changes in stockholders' equity during
a period except those resulting from investments by or distributions to
stockholders. The Company has determined that the only adjustment to net income
(loss) to determine comprehensive income (loss) impacting the Company is
cumulative translation adjustments.

5. STOCK-BASED COMPENSATION

SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure," provides alternative methods of transition for a voluntary change
to the fair value method of accounting for stock-based employee compensation. In
addition, this statement amends the disclosure requirements of SFAS No. 123,
"Accounting for Stock-Based Compensation", to require more prominent disclosures
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results in both annual and interim
financial statements. As permitted by SFAS No. 148, the Company will continue to
apply the provisions of APB Opinion No. 25, "Accounting for Stock-Based
Compensation," for all employee stock option grants and has elected to disclose
pro forma net income and earnings per share amounts as if the fair-value based
method had been applied in measuring compensation costs.






                                       5




                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below sets forth the pro forma net income (loss) and the pro forma net
income (loss) per share information as calculated in accordance with SFAS No.
123 for the three-month and nine-month periods ended October 2, 2004 and
September 27, 2003:



                                                                   Three Months Ended               Nine Months Ended
                                                               --------------------------       --------------------------
                                                                 October 2,    September 27,     October 2,    September 27,
                                                                   2004            2003            2004            2003
                                                               ------------    -----------      ------------   -----------

   Net income (loss) - as reported ........................    $   314,828    $  (484,396)     $   989,745    $(1,414,751)
     Plus: stock-based compensation
        expense included in reported net income (loss) ....              -              -                -              -
     Less: Stock-based compensation expense
        determined using the fair value method ............        (28,000)       (69,750)        (116,000)      (219,750)
                                                               -----------    -----------      -----------    -----------
     Net income (loss) - pro forma ........................    $   286,828    $  (554,146)     $   873,745    $(1,634,501)
                                                               ===========    ===========      ===========    ===========

     Basic net income (loss) per share:
      As reported .........................................    $       .10    $      (.16)     $       .32    $      (.45)
      Pro forma ...........................................    $       .09    $      (.18)     $       .28    $      (.52)
     Diluted net income (loss) per share:
      As reported .........................................    $       .10    $      (.16)     $       .31    $      (.45)
      Pro forma ...........................................    $       .09    $      (.18)     $       .28    $      (.52)


The SFAS No. 123 method of accounting has been applied to options granted in
periods after December 31, 1994 and the resulting pro forma compensation expense
may not be indicative of pro forma expense in future years.

The fair value of each of the options and purchase plan subscription rights
granted in 2004 and 2003 was estimated on the date of grant using the
Black-Scholes option valuation model.

The following weighted average assumptions were utilized:

                                                        2004          2003
                                                        ----          ----
Expected option life (years).......................      2.5           2.6
Expected volatility................................    40.00%        45.00%
Risk-free interest rate............................     2.50%         3.50%
Expected dividend yield............................     0.00%         0.00%

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options and subscription rights have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its employee
stock options and subscription rights.

6. GOODWILL

The changes in the carrying amount of goodwill for the nine-month periods ended
October 2, 2004 and September 27, 2003 are as follows:

                                                       2004           2003
                                                       ----           ----
Balance, beginning of year.....................    $3,122,563      $2,491,146
Foreign currency adjustment....................        76,044         461,778
                                                   ----------      ----------
Balance, end of period.........................    $3,198,607      $2,952,924
                                                   ==========      ==========
7. INVENTORIES

Inventories consist of the following:

                                                    October 2,      January 3,
                                                       2004            2004
                                                       ----            ----
Finished goods.................................    $  119,131      $  121,613
Work in process................................     1,214,587       1,806,000
Raw materials and purchased parts..............     1,537,106       1,260,333
                                                   ----------      ----------
Total..........................................    $2,870,824      $3,187,946
                                                   ==========      ==========



                                       6


                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total inventories are net of valuation allowances for obsolescence and cost
overruns of $2,210,000 at October 2, 2004 and $1,787,000 at January 3, 2004.

8. CURRENT AND LONG-TERM DEBT

The Company was obligated under the following debt instruments at October 2,
2004 and January 3, 2004:



                                                                              October 3,      January 3,
                                                                                 2004           2004
                                                                              ----------     -----------

The CIT Group/Business Credit, Inc. (A):
   Revolving line of credit, interest 1/2% above prime .....................        -        $  498,416
   Term loan A, due October 8, 2008, variable interest above LIBOR or prime.  $1,150,000      1,425,000
   Term loan B, due October 8, 2010, variable interest above LIBOR or prime.   2,357,144      2,651,786

The Bank of Nova Scotia (B):
 Capital leases, interest 6.7%, due October 2004 ...........................       9,801         43,339
 Capital leases, interest 8.7%, due June 2005 ..............................     130,780        180,841
 Capital leases, interest 7.3%, due April 2006 .............................     130,218        161,287
 Capital leases, interest 7.9%, due June 2006 ..............................     111,980        136,628
First Insurance Funding Corp.-
 Note payable, insurance premiums, interest 6.75% due April 1, 2004.........        -            65,214
                                                                              ----------     ----------
                                                                               3,889,923      5,162,511
Less current portion .......................................................     868,795        954,405
                                                                              ----------     ----------
Long-term portion ..........................................................  $3,021,128     $4,208,106
                                                                              ==========     ==========


(A) On October 8, 2003, the Company completed the refinancing of its revolving
credit and term loan obligations with a new credit facility provided by The CIT
Group/Business Credit, Inc. ("CIT") that provides for a three-year secured
revolving credit, term loan and letter of credit facility for $9,250,000. All
obligations due to its prior bank were repaid from the proceeds of such
refinancing. The new financing agreement with CIT consists of a $5,000,000
revolving line of credit, that is temporarily reduced by $250,000 until certain
conditions are met, a $1,500,000 machinery and equipment term loan ("Term Loan
A") and a $2,750,000 real estate term loan ("Term Loan B"). In connection with
this new financing agreement, the Company was required to place, over the life
of the loan, $1,500,000 as restricted cash with CIT. The revolving line of
credit is subject to an availability limit under a borrowing base calculation
(85% of eligible accounts receivable as defined in the financing agreement plus
100% of the $1,500,000 restricted cash). At October 2, 2004, the Company had
available borrowing capacity under its revolving line of credit of $4,200,000.
The revolving line of credit bears interest at the prime rate plus 1/2 percent
(currently 5.50%). The principal amount of Term Loan A is payable in 60 equal
monthly installments of $25,000 and bears interest at the prime rate plus one
percent (currently 6.0%). The principal amount of Term Loan B is payable in 84
equal monthly installments of $32,738 and bears interest at the prime rate plus
one percent (currently 6.0%). At October 2, 2004, the Company, under the terms
of its agreement with CIT, elected to convert $1,000,000 of Term Loan A and
$2,000,000 of Term Loan B from their prime rate base to LIBOR-based interest
rate loans. The current interest rates on such LIBOR interest rate loans was
4.485%. The current LIBOR interest rate options expired October 12, 2004 and
were renewed for six months at 5.49%. The new LIBOR interest rate options will
expire April 11, 2005. The revolving line of credit and the term loans are
secured by substantially all of the Company's assets located within the United
States and the pledge of 65% of the stock of the Company's subsidiaries located
in Costa Rica and Canada. The provisions of the financing agreement require the
Company to maintain certain financial and other covenants. The Company was in
compliance with these covenants at October 2, 2004.

(B) Capital leases included in property, plant and equipment, net, have a
depreciated cost of approximately $587,000 at October 2, 2004 and $590,000 at
January 3, 2004.

9. INCOME TAXES

The Company's effective tax rate for the quarter and nine months ended October
2, 2004 reflects U.S. Federal Alternative Minimum Tax and State income taxes
that are due based on certain statutory limitations on the use of the Company's
net operating loss carryforwards. A benefit was recorded in the amount of
$75,000 based on available Canadian tax credits due to the increased
profitability of Filtran Microcircuits Inc.



                                       7



                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company currently has significant deferred tax assets resulting from net
operating loss carryforwards, tax credit carryforwards and deductible temporary
differences, which should reduce taxable income in future periods. A valuation
allowance (or write-down) is required when it is more likely than not that all
or a portion of a deferred tax asset will not be realized. The Company's 2002
and 2003 domestic net losses weighed heavily in the Company's overall
assessment. As a result of the assessment, the Company established a full
valuation allowance for its remaining net domestic deferred tax assets at
December 28, 2002. This assessment continued unchanged in fiscal years 2003 and
2004. The Company has reclassified portions of its domestic valuation allowance
on its deferred tax assets at January 3, 2004 from non-current to current to
conform to the current presentation.

Internal Revenue Service Code Section 382 places a limitation on the utilization
of net operating loss carryforwards when an ownership change, as defined in the
tax law, occurs. Generally, an ownership change occurs when there is a greater
than 50 percent change in ownership. If such change should occur, the actual
utilization of net operating loss carryforwards, for tax purposes, would be
limited annually to a percentage of the fair market value of the Company at the
time of such change.

10. BUSINESS SEGMENT DATA

The Company's operations are conducted primarily through two business segments:
(1) electronic components and (2) microwave micro-circuitry. These segments, and
the principal operations of each, are as follows:

Electronic components: Design, manufacture and sale of electronic component
devices offering extremely broad frequency coverage and high performance
characteristics for communications, defense and aerospace applications. Of the
identifiable assets, 80% are located in the United States and 20% are located in
Costa Rica. Included in such segment are the Multi-Mix(R) Microtechnology net
assets.

Microwave micro-circuitry: Design, manufacture and sale of microstrip, bonded
stripline and thick metal-backed Teflon (R) (PTFE) and mixed dielectric
multilayer circuits for communications, defense and aerospace applications. All
of the identifiable assets are located in Canada.

Information about the Company's operations in different areas of its business
follows. Operating income is net sales less operating expenses. Operating
expenses exclude interest expense, other income and income taxes. Corporate
assets consist principally of cash and corporate expenses are immaterial.
Intersegment sales and the resulting intersegment assets are principally due to
intercompany sales from the microwave micro-circuitry segment to the electronic
components segment.



                                                              Three Months Ended              Nine Months Ended
                                                         -----------------------------  -----------------------------
                                                          October 2,      September 27,  October 2,     September 27,
                                                            2004              2003         2004             2003
                                                         ---------         ---------    ---------         ---------
                                                                            (In thousands of dollars)

Industry segments:
    Sales to unaffiliated customers:
             Electronic components                       $   6,188         $   5,418     $  18,968         $  17,211
             Microwave micro-circuitry                       1,458             1,026         4,319             2,546
    Intersegment sales                                         (26)              (87)         (123)             (276)
                                                         ---------         ---------     ---------         ---------
             Consolidated                                $   7,620         $   6,357     $  23,164         $  19,481
                                                         =========         =========     =========         =========
    Income (loss) before income taxes:
      Operating income (loss):
             Electronic components                       $     312         $    (514)    $     811         $  (1,377)
             Microwave micro-circuitry                          71                83           354               (61)
      Interest and other expense, net                          (53)              (52)         (205)             (164)
      Gain on disposition of assets                              -                33             -               104
                                                         ---------         ---------     ---------         ---------
             Consolidated                                $     330         $    (450)    $     960         $  (1,498)
                                                         =========         =========     =========         =========

      Depreciation and amortization:
             Electronic components                       $     712         $     758     $   2,240         $   2,255
             Microwave micro-circuitry                          60                56           179               168
                                                         ---------         ---------     ---------         ---------
             Consolidated                                $     772         $     814     $   2,419         $   2,423
                                                         =========         =========     =========         =========
      Capital expenditures:
             Electronic components                       $     168         $     158     $     746         $     917
             Microwave micro-circuitry                          36                 5           101                48
                                                         ---------         ---------     ---------         ---------
             Consolidated                                $     204         $     163     $     847         $     965
                                                         =========         =========     =========         =========




                                       8



                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                  October 2,      September 27,
                                                    2004              2003
                                                  ---------         ---------
         Identifiable assets:
             Electronic components                $  25,347         $  29,339
             Microwave micro-circuitry                6,164             5,537
             Corporate                                2,899               557
             Intersegment                               (29)              (79)
                                                  ---------         ---------
             Consolidated                         $  34,381         $  35,354
                                                  =========         =========

11. NET INCOME (LOSS) PER COMMON SHARE

Basic net income (loss) per common share is calculated by dividing net income
(loss) by the weighted average number of common shares outstanding during the
period.

The calculation of diluted net income (loss) per common share is similar to that
of basic net income (loss) per common share, except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if all potentially dilutive common shares, principally those
issuable under stock options and warrants, were issued during the reporting
period to the extent they are not anti-dilutive.


The following table summarizes the calculation of basic and diluted net income
(loss) per share:




                                                                  Three Months Ended                   Nine Months Ended
                                                             ----------------------------        ----------------------------
                                                                October 2,    September 27,         October 2,    September 27,
                                                                  2004            2003                2004            2003
                                                             ----------------------------        ----------------------------

Numerator-
Net income (loss) available to common stockholders ........  $     314,828    $  (484,396)       $     989,745   $ (1,414,751)
                                                             =============    ===========        =============    ===========

Basic net income (loss) per share

Weighted average number of shares outstanding for
basic net income (loss) per share-
Common stock ..............................................      3,131,161      3,120,624            3,125,188      3,120,437
                                                             =============    ===========        =============    ===========

Net income (loss) per common share - basic ................  $         .10    $      (.16)       $         .32    $      (.45)
                                                             =============    ===========        =============    ===========

Diluted net income (loss) per share

Weighted average number of shares outstanding for diluted
net income (loss) per share:
Common stock ..............................................      3,131,161      3,120,624            3,125,188      3,120,437
Effect of dilutive securities - stock options (1) .........         23,624           -                  25,977           -
                                                             -------------    -----------        -------------    -----------
Weighted average number of shares outstanding for
diluted net income (loss) per share .......................      3,154,785      3,120,624            3,151,165      3,120,437
                                                             =============    ===========        =============    ===========

Net income (loss) per common share - diluted ..............  $         .10    $      (.16)       $         .31    $      (.45)
                                                             =============    ===========        =============    ===========


(1) Represents additional shares resulting from assumed conversion of stock
    options less shares purchased with the proceeds therefrom.

    Diluted earnings per share excludes 328,000 and 444,000 shares underlying
    stock options for the three months ended October 2, 2004 and September 27,
    2003, respectively, and 328,000 and 444,000 shares underlying stock options
    for the nine months ended October 2, 2004 and September 27,
    2003,respectively, as the exercise price of these options was greater than
    the average market value of the common shares, resulting in an anti-dilutive
    effect on earnings per share. For the quarter and nine months ended
    September 27, 2003, 429,775 common stock warrants outstanding were excluded
    from the calculation of dilutive securities because the warrant exercise
    price of $17.80 was greater than the average market value of the common
    shares.


12. RELATED PARTY TRANSACTIONS

In May 1998, the Company sold 22,000 shares of Common Stock to Mason N. Carter,
Chairman, President and Chief Executive Officer of the Company, at a price of
$11.60 per share, which approximated the average closing price of the Company's
Common Stock during the first quarter of 1998. The Company lent Mr. Carter
$255,000 in connection with the purchase of these shares and combined that loan
with a prior loan to Mr. Carter in the amount of $105,000. The resulting total
principal amount of $360,000 was payable May 4, 2003 and bore interest at a
variable interest rate based on the prime rate of the Company's lending bank.
This loan was further



                                       9


                            MERRIMAC INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

amended on July 29, 2002. Accrued interest of $40,000 was added to the
principal, bringing the new principal amount of the loan to $400,000, the due
date was extended to May 4, 2006, and interest (at the same rate as was
previously applicable) is now payable monthly. Mr. Carter has pledged 33,000
shares of Common Stock as security for this loan, which is a full-recourse loan.

On August 31, 2000, in connection with an amendment to Mr. Carter's employment
agreement, the Company loaned Mr. Carter an additional $280,000. Interest on the
loan varies and is based on the prime rate of the Company's lending bank,
payable in accordance with Mr. Carter's employment agreement. Each year the
Company is required to forgive 20% of the amount due under this loan and the
accrued interest thereon. During 2003, the Company forgave $56,000 of principal
and $7,000 of accrued interest and paid a tax gross-up benefit of $8,300. During
2004, the Company forgave $56,000 of principal and $4,500 of accrued interest
and estimates that $56,000 of principal and $3,000 of accrued interest will be
forgiven in fiscal year 2005.

During the third quarter and first nine months of 2004, the Company's outside
general counsel KMZ Rosenman was paid $59,000 and $211,000, respectively, for
providing legal services to the Company. During the third quarter and first nine
months of 2003, KMZ Rosenman was paid $46,000 and $203,000, respectively. A
director of the Company is counsel to KMZ Rosenman but does not share in the
fees that the Company pays to such law firm and his compensation is not based on
such fees.

During 2004 and 2003 the Company retained Career Consultants, Inc. and SK
Associates to perform executive searches and to provide other services to the
Company. The Company paid an aggregate of $1,000 and $18,000 to these companies
during the third quarter and first nine months of 2004, respectively. The
Company paid an aggregate of $29,000 to these companies during the first nine
months of 2003. A director of the Company is the chairman and chief executive
officer of these companies.

During the first nine months of 2003, a director of the Company was paid $12,000
for providing financial-related consulting services to the Company. This
agreement terminated in April 2003.

During the third quarter and first nine months of 2004, a director of the
Company was paid $9,000 and $27,000, respectively, for providing
technology-related consulting services to the Company. For the third quarter and
first nine months of 2003, such director was paid $9,000 and $27,000,
respectively.

During the third quarter and first nine months of 2004, DuPont Electronic
Technologies ("DuPont"), a stockholder and the employer of a director, was paid
$9,000 and $66,000, respectively, for providing technological and
marketing-related personnel and services on a cost-sharing basis to the Company
under the Technology Agreement dated February 28, 2002. During the third quarter
and first nine months of 2003, DuPont was paid $25,000 and $75,000,
respectively.

Each director who is not an employee of the Company receives a monthly
director's fee of $1,500, plus an additional $500 for each meeting of the Board
and of any Committees of the Board attended. Beginning in fiscal year 2004, the
Chair of the Audit Committee receives an annual fee of $2,500 for his services
in such capacity. The directors are also reimbursed for reasonable travel
expenses incurred in attending Board and Committee meetings. In addition,
pursuant to the 2001 Stock Option Plan, each non-employee director is granted an
immediately exercisable option to purchase 2,500 shares of the Common Stock of
the Company on the date of each Annual Meeting of Stockholders. Each such grant
is at the fair market value on the date of such grant and will expire on the
tenth anniversary of the date of the grant. On June 17, 2004, non-qualified
stock options to purchase an aggregate of 20,000 shares were issued to eight
directors at an exercise price of $9.01 per share.

Infineon Technologies AG ("Infineon") and DuPont hold registration rights which
currently give them the right to register an aggregate of 1,003,413 shares of
Common Stock of the Company.



                                       10



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

The Company's management makes certain assumptions and estimates that impact the
reported amounts of assets, liabilities and stockholders' equity, and revenues
and expenses. The management judgments that are currently the most critical are
related to the accounting for the Company's investments in Multi-Mix (R)
Microtechnology, contract revenue recognition, inventory valuation, valuation of
goodwill and valuation of deferred tax assets.

Evaluation of Multi-Mix(R) Assets Under SFAS No. 144

Following is a summary of the carrying amounts of the Multi-Mix (R)
Microtechnology net assets included in the Company's consolidated financial
statements at October 2, 2004 and the related future planned purchases and lease
obligation commitments through January 2006.

Net assets:
Property, plant and equipment, at cost.............................. $14,084,000
Less accumulated depreciation and amortization......................   5,381,000
                                                                     -----------
Property, plant and equipment, net..................................   8,703,000
Inventories.........................................................     164,000
Other assets, net...................................................     296,000
                                                                     -----------
Total net assets at October 2, 2004................................. $ 9,163,000
                                                                     -----------
Commitments:
Planned equipment purchases for the remainder of 2004............... $   250,000
Lease obligations through January 2006..............................     400,000
                                                                     -----------
Total commitments................................................... $   650,000
                                                                     -----------
Total net assets and commitments.................................... $ 9,813,000
                                                                     ===========

The Company anticipates receiving additional orders during the remainder of 2004
and 2005 for its Multi-Mix(R) Microtechnology products, for which substantial
research and development costs have also been incurred. Due to economic and
market conditions in the wireless industry over the past several years,
telecommunications system service providers substantially reduced their capital
equipment purchases from our customers. While these circumstances have resulted
in the delay or cancellation of Multi-Mix(R) Microtechnology product purchases
that had been anticipated from certain specific customers or programs, in
connection with the improved conditions in the industry, the Company has
implemented a strategic plan utilizing product knowledge and customer focus to
expand specific sales opportunities. However, continued extended delay or
reduction from planned levels in new orders expected from customers for these
products could require the Company to pursue alternatives related to the
utilization or realization of these assets and commitments, the net result of
which could be materially adverse to the financial results and position of the
Company. In accordance with the Company's evaluation of Multi-Mix(R) under SFAS
No. 144, the Company has determined no provision for impairment is required at
this time. Management will continue to monitor the recoverability of the
Multi-Mix(R) assets.

Contract Revenue Recognition

Contract revenue and related costs on fixed-price and cost-reimbursement
contracts that require customization of products to customer specifications are
recorded when title transfers to the customer, which is generally on the date of
shipment. Prior to shipment, manufacturing costs incurred on such contracts are
recorded as work-in-process inventory. Anticipated losses on contracts are
charged to operations when identified. Revenue related to non-recurring
engineering charges is generally recognized upon shipment of the initial units
produced or based upon contractually established stages of completion. The cost
rates utilized for cost-reimbursement contracts are subject to review by third
parties and can be revised, which can result in additions to or reductions from
revenue. Revisions which result in reductions to revenue are recognized in the
period that the rates are reviewed and finalized; additions to revenue are
recognized in the period that the rates are reviewed, finalized, accepted by the
customer, and collectability from the customer is assured.

Inventory Valuation

Inventories are valued at the lower of average cost or market. Inventories are
periodically reviewed for their projected manufacturing usage utilization and,
when slow-moving or obsolete



                                       11




inventories are identified, a provision for a potential loss is made and charged
to operations. Total inventories are net of valuation allowances for
obsolescence and cost overruns of $2,210,000 at October 2, 2004 and $1,787,000
at January 3, 2004.

Valuation of Goodwill

With the adoption of SFAS No. 142 by the Company on December 30, 2001, goodwill
is no longer subject to amortization over its estimated useful life. However,
goodwill is subject to at least an annual assessment for impairment and more
frequently if circumstances indicate a possible impairment. The Company
performed the annual assessment during the fourth quarter of 2003 and determined
there was no impairment.

Valuation of Deferred Tax Assets

The Company currently has significant deferred tax assets resulting from net
operating loss carryforwards, tax credit carryforwards and deductible temporary
differences, which should reduce taxable income in future periods. A valuation
allowance (or write-down) is required when it is more likely than not that all
or a portion of a deferred tax asset will not be realized. The Company's 2002
and 2003 net losses weighed heavily in the Company's overall assessment. As a
result of the assessment, the Company established a full valuation allowance for
its remaining net domestic deferred tax assets at December 28, 2002. This
assessment continued unchanged in fiscal years 2003 and 2004.


                  CONSOLIDATED STATEMENTS OF OPERATIONS SUMMARY
                                   (UNAUDITED)

The following table reflects the percentage relationships of items from the
Consolidated Statements of Operations as a percentage of net sales.



                                                                            Percentage of Net Sales
                                                                            -----------------------
                                                            Three Months Ended                     Nine Months Ended
                                                         ------------------------            ------------------------
                                                        October 2,      September 27,       October 2,      September 27,
                                                          2004             2003               2004             2003
                                                         ------           ------             ------           -------

Net sales....................................            100.0%           100.0%              100.0%           100.0%
                                                         ------           ------              ------           ------
Costs and expenses:
  Cost of sales..............................             58.5             65.4                57.6             63.0
  Selling, general and administrative........             31.8             35.6                31.6             36.8
  Research and development...................              4.7              5.0                 5.7              6.9
  Restructuring charges......................                -               .8                   -               .7
                                                        ------           ------              ------           ------
                                                          95.0            106.8                94.9            107.4
                                                        ------           ------              ------           ------

Operating income (loss)......................              5.0             (6.8)                5.1             (7.4)
Interest and other expense, net..............              (.7)             (.8)                (.9)             (.8)
Gain on disposition of assets................                -               .5                   -               .5
                                                        ------           ------              ------           ------

Income (loss) before income taxes............              4.3             (7.1)                4.2             (7.7)
Provision (benefit) for income taxes.........               .2               .5                 (.1)             (.4)
                                                        ------           ------              ------           ------
Net income (loss)............................              4.1%            (7.6)%               4.3%            (7.3)%
                                                        ======           ======              ======           ======


THIRD QUARTER AND THE FIRST NINE MONTHS OF 2004 COMPARED TO THE THIRD QUARTER
AND FIRST NINE MONTHS OF 2003

Consolidated results of operations for the third quarter of 2004 reflect an
increase in net sales from the third quarter of 2003 of $1,263,000 or 19.9% to
$7,620,000. This increase was attributable to a $770,000 increase in net sales
of electronic components and a $433,000 increase in sales of microwave
micro-circuitry products from the Company's wholly-owned subsidiary Filtran
Microcircuits Inc. ("FMI"). Consolidated results of operations for the first
nine months of 2004 reflect an increase in net sales compared to the first nine
months of 2003 of $3,683,000 or 18.9% to $23,164,000. For the first nine months
of 2004, net sales for the electronic components segment increased $1,757,000.
The increase in net sales for the electronic components segment for the third
quarter and first nine months of 2004 is attributable to improved orders in 2004
and a higher backlog at the beginning of 2004 as compared to the beginning of
2003; the higher backlog reflected new orders from existing customers in the
Company's defense business. Sales of microwave micro-circuitry products from FMI
increased $1,773,000 for the first nine months of 2004. The increase in sales of
the microwave micro-circuitry segment for the third quarter and first nine
months of 2004 was due to new orders from both existing and new customers due to
the continued efforts to diversify FMI into wireless base stations, automotive
and defense applications. FMI anticipates much of this new order volume to renew
in future periods.



                                       12



Orders of $7,768,000 were received during the third quarter of 2004, an increase
of $1,378,000 or 21.6% compared to $6,390,000 in orders received during the
third quarter of 2003. Orders of $23,290,000 were received for the first nine
months of 2004, an increase of $1,671,000 or 7.7% compared to $21,619,000 in
orders received for the first nine months of 2003. Backlog increased by $126,000
to $12,521,000 at the end of third quarter 2004 compared to $12,395,000 at
year-end 2003.

The Company believes that while the wireless subscriber base continues to grow,
the recent economic downturn, resulting in reduced spending by wireless
telecommunications service providers, has caused many wireless
telecommunications equipment manufacturers to delay or forego purchases of the
Company's products. However, the Company expects that its defense and satellite
customers should continue to maintain their approximate current levels of orders
for the remainder of fiscal year 2004 and during fiscal year 2005, though there
are no assurances they will do so. The Company also anticipates increased levels
of orders during fiscal years 2004 and 2005 for its Multi-Mix(R) Microtechnology
products, based on inquiries from existing customers, requests to quote from new
and existing customers and market research. The improved telecommunications
sector and the continued efforts to diversify FMI into wireless base stations,
automotive and defense applications has resulted in additional orders for FMI.

Consolidated gross profit for the third quarter of 2004 increased by $961,000 to
$3,162,000 or 41.5% of consolidated sales of $7,620,000 compared to gross profit
of $2,201,000 or 34.6% of consolidated sales of $6,357,000 in the third quarter
of 2003. Consolidated gross profit for the first nine months of 2004 increased
by $2,611,000 to $9,818,000 or 42.4% of consolidated sales of $23,164,000
compared to gross profit of $7,207,000 or 37.0 % of consolidated sales of
$19,481,000 for the first nine months of 2003. Gross profit for the third
quarter of 2004 for the electronic components segment increased by $873,000 to
$2,749,000 or 44.4% of segment net sales of $6,188,000 compared to gross profit
of $1,876,000 or 34.6% of segment net sales of $5,418,000 in the third quarter
of 2003. Gross profit for the first nine months of 2004 for the electronic
components segment increased by $2,008,000 to $8,501,000 or 44.8% of segment net
sales of $18,968,000 compared to gross profit of $6,494,000 or 37.7% of segment
net sales of $17,211,000 for the first nine months of 2003. The increases in
gross profit for the third quarter and first nine months of 2004 for the
electronic components segment were due to the overall increase in segment sales
along with savings resulting from the increased utilization of the Company's
West Caldwell, New Jersey and Costa Rica manufacturing production facilities,
better product mix and the benefits of the cost containment and restructuring
programs instituted during 2003. Cost of sales for the electronic components
segment also reflects increased staffing to meet production requirements and a
reduction of intersegment purchases from FMI of $60,000 and $153,000 for the
third quarter and first nine months of 2004, respectively. Gross profit for the
third quarter of 2004 for the microwave micro-circuitry segment increased by
$88,000 to $413,000 or 27.2% of segment net sales of $1,458,000, compared to
$325,000 or 31.7% of segment net sales of $1,026,000 in the third quarter of
2003. FMI sales include intersegment sales of $27,000 and $87,000 in the third
quarter of 2004 and 2003, respectively. Gross profit for the first nine months
of 2004 for the microwave micro-circuitry segment increased by $603,000 to
$1,317,000 or 30.5% of segment net sales of $4,319,000, compared to $714,000 or
28.0% of segment net sales of $2,546,000 in the first nine months of 2003. FMI
sales include intersegment sales of $123,000 and $276,000 in the first nine
months of 2004 and 2003, respectively. The decrease in gross margin percent for
the third quarter of 2004 is due to higher material and overhead costs,
including additional overtime, related to the new defense orders booked in 2004.
The higher material and overtime costs for such defense orders are not expected
to continue into future periods, but certain additional overhead costs may
affect future results. The improved gross margin percent for FMI for the first
nine months of 2004 is due to the higher sales level and improved absorption of
fixed costs.

Selling, general and administrative expenses of $2,419,000 for the third quarter
of 2004 increased by $157,000 or 6.9%, and when expressed as a percentage of net
sales, decreased by 3.8 percentage points to 31.8%. This increase was due to
higher commissions from the higher quarterly sales level and certain higher
marketing and proposal expenses. Selling, general and administrative expenses of
$7,327,000 for the first nine months of 2004 increased by $151,000 or 2.1%, and
when expressed as a percentage of net sales, decreased by 5.2 percentage points
to 31.6% compared to the first nine months of 2003. 2003 selling, general and
administrative expenses included expenses associated with bank modification
agreements entered into during the second quarter and additional professional
fees that were incurred totaling approximately $300,000. The 2003 expenses
described above were offset by higher commissions from the higher sales level
and higher marketing and administrative costs.

Research and development expenses for new products were $359,000 for the third
quarter of 2004, an increase of $43,000 or 13.5% and when expressed as a
percentage of net sales, a decrease of 0.3 percentage points to 4.7% compared to
the third quarter of 2003. Except for $47,000 of expenses in the third quarter
of 2004 at FMI, an increase of $5,000 from such FMI expenses in the third
quarter of the prior year, substantially all of the research and development
expenses were related to Multi-Mix(R) Microtechnology and Multi-Mix PICO(TM)
products. Research and



                                       13



development expenses for new products were $1,327,000 for the first nine months
of 2004, a decrease of $13,000 or 1.0% and when expressed as a percentage of net
sales, a decrease of 1.2 percentage points to 5.7% compared to the first nine
months of 2003. Except for $166,000 of expenses at FMI (an increase of $41,000
from such FMI expenses in the first nine months of 2003) substantially all of
the research and development expenses were related to Multi-Mix(R)
Microtechnology and Multi-Mix PICO(TM) products.

During the third quarter of 2003 the Company reduced its headcount by 2 persons,
who were principally involved in manufacturing support and sales. The Company
recorded a personnel restructuring charge of $54,000, consisting of severance
and certain other personnel costs during the third quarter of 2003. During the
first nine months of 2003 the Company reduced its head count by 13 persons,
principally involved in production, manufacturing support, sales and
administration. The Company recorded personnel restructuring charges of
$128,000, consisting of severance and certain other personnel costs during the
first nine months of 2003.

Consolidated operating income for the third quarter of 2004 was $384,000
compared to a consolidated operating loss of $431,000 in the third quarter of
2003. Consolidated operating income for the first nine months of 2004 was
$1,164,000 compared to a consolidated operating loss of $1,437,000 for the first
nine months of 2003.

Operating income for the electronic components segment was $312,000 for the
third quarter of 2004 compared to an operating loss of $514,000 in the third
quarter of 2003. Operating income for the microwave micro-circuitry segment was
$71,000 for the third quarter of 2004 compared to operating income of $83,000
for the third quarter of 2003. For the first nine months of 2004, the Company's
operating income for its electronic component segment was $811,000 compared to
an operating loss of $1,377,000 for the first nine months of 2003. For the first
nine months of 2004, operating income for the microwave micro-circuitry segment
was $354,000 compared to an operating loss of $61,000 for the first nine months
of 2003.

Interest and other expense, net was $54,000 for the third quarter of 2004
compared to interest and other expense, net of $52,000 for the third quarter of
2003. Interest and other expense, net was $205,000 for the first nine months of
2004 compared to interest and other expense, net of $165,000 for the first nine
months of 2003. Interest expense for the third quarter and first nine months of
2004 was principally incurred on borrowings under the new revolving line of
credit and term loans which the Company consummated during the fourth quarter of
2003 at higher interest rates than the previous facility. Interest expense for
the third quarter and first nine months of 2003 was principally incurred on
borrowings under the previous mortgage loan and the term loan facility entered
into during fiscal year 2002.

Net income for the third quarter of 2004 was $315,000 compared to a net loss of
$484,000 for the third quarter of 2003. Net income per diluted share for the
third quarter of 2004 was $.10 compared to a net loss of $.16 per share for the
third quarter of 2003.

Net income for the first nine months of 2004 was $990,000 compared to a net loss
of $1,415,000 for the first nine months of 2003. Net income per diluted share
for the first nine months of 2004 was $.31 compared to a net loss of $.45 per
share for the first nine months of 2003.

LIQUIDITY AND CAPITAL RESOURCES

The Company had liquid resources comprised of cash and cash equivalents totaling
approximately $2,900,000 at the end of the third quarter of 2004 compared to
approximately $450,000 at the end of 2003. The Company's working capital was
approximately $8,700,000 and its current ratio was 2.9 to 1 at the end of the
third quarter of 2004 compared to $6,900,000 and 2.6 to 1, respectively, at the
end of 2003.

The Company's operating activities generated positive cash flows of $4,479,000
during the first nine months of 2004 compared to the utilization of $237,000 of
cash flows during the first nine months of 2003. The primary sources of
operating cash flows for the first nine months of 2004 were net income of
$990,000 which was reduced by depreciation and amortization of $2,419,000, the
reduction of accounts receivable of $700,000, a reduction in inventories of
$320,000,and an aggregate increase in accounts payable and accrued liabilities
of $445,000 partly offset by a reduction of customer deposits of $118,000 and an
increase in other current assets of $332,000.

The Company made net cash investments in property, plant and equipment of
$847,000 during the first nine months of 2004 (and had unpaid invoices for such
investments of $214,000 at October 2, 2004), compared to net cash investments
made in property, plant and equipment of $965,000 (and unpaid invoices for such
investments of $85,000 at September 27, 2003) during the first nine months of
2003. These capital expenditures are related to new production and test
equipment capabilities in connection with the introduction of new products and
enhancements to existing products. The depreciated cost of capital equipment
associated with Multi-Mix(R) Microtechnology was $8,703,000 at the end of the
third quarter of 2004, a decrease of $1,361,000



                                       14



compared to $10,064,000 at the end of fiscal year 2003.

The Company's planned equipment purchases and other commitments are expected to
be funded through its revolving credit facility of $5,000,000, which becomes
due October 8, 2006, supplemented by cash resources and cash flows that are
expected to be provided by operations. On October 8, 2003, the Company completed
the refinancing of its revolving credit and term loan obligations with a new
credit facility provided by The CIT Group/Business Credit, Inc. ("CIT") that
provides for a three-year secured revolving credit, term loan and letter of
credit facility for $9,250,000. All obligations due to its prior bank were
repaid from the proceeds of such refinancing. The new financing agreement with
CIT consists of a $5,000,000 revolving line of credit, that is temporarily
reduced by $250,000 until certain conditions are met, a $1,500,000 machinery and
equipment term loan ("Term Loan A") and a $2,750,000 real estate term loan
("Term Loan B"). In connection with this new financing agreement, the Company
was required to place, over the life of the loan, $1,500,000 as restricted cash
with CIT. The revolving line of credit is subject to an availability limit under
a borrowing base calculation (85% of eligible accounts receivable as defined in
the financing agreement plus 100% of the $1,500,000 restricted cash). At October
2, 2004, the Company had available borrowing capacity under its revolving line
of credit of $4,200,000. The revolving line of credit bears interest at the
prime rate plus 1/2 percent (currently 5.50%). The principal amount of Term Loan
A is payable in 60 equal monthly installments of $25,000 and bears interest at
the prime rate plus one percent (currently 6.0%). The principal amount of Term
Loan B is payable in 84 equal monthly installments of $32,738 and bears interest
at the prime rate plus one percent (currently 6.0%). At October 2, 2004, the
Company, under the terms of its agreement with CIT, elected to convert
$1,000,000 of Term Loan A and $2,000,000 of Term Loan B from their prime rate
base to LIBOR-based interest rate loans. The current interest rates on such
LIBOR interest rate loans was 4.485%. The current LIBOR interest rate options
expired October 12, 2004 and were renewed for six months at 5.49%. The new LIBOR
interest rate options will expire April 11, 2005. The revolving line of credit
and the term loans are secured by substantially all of the Company's assets
located within the United States and the pledge of 65% of the stock of the
Company's subsidiaries located in Costa Rica and Canada. The provisions of the
financing agreement require the Company to maintain certain financial and other
covenants. The Company was in compliance with these covenants at October 2,
2004.

Depreciation and amortization expenses exceeded capital expenditures for
production equipment during the first nine months of 2004 by approximately
$1,571,000, and the Company anticipates that depreciation and amortization
expenses will exceed capital expenditures in fiscal year 2004 by approximately
$2,000,000. The Company intends to issue commitments to purchase $420,000 of
capital equipment from various vendors. The Company anticipates that such
equipment will be purchased and become operational during 2004.

The functional currency for the Company's wholly-owned subsidiary FMI is the
Canadian dollar. The change in accumulated other comprehensive income for the
first nine months of 2004 and 2003 reflect the changes in the exchange rates
between the Canadian dollar and the United States dollar for those respective
periods. The functional currency for the Company's Costa Rica operations is the
United States dollar.

The Company entered into an agreement effective January 2001, with a customer to
relinquish to this customer approximately half of the Company's 17,000
square-foot leased manufacturing facility in Costa Rica. Associated with the
transaction, the Company entered into a new four-year lease agreement with a
five-year renewal option with its Costa Rica landlord for the reduced space. In
addition, the Company transferred certain employees to its customer, agreed to
share certain personnel resources and common costs, and committed to provide
certain management, administrative and other services to its customer. On March
31, 2003, the Company relinquished the balance of the space to its customer. The
completion of these transactions resulted in a gain of $71,000 during the second
quarter of 2003. In connection with the 2001 agreement, the Company received
$450,000 from its customer. The Company reduced its facility occupancy expenses
by approximately $22,000 in the first quarter of 2003.

RELATED PARTY TRANSACTIONS

In May 1998, the Company sold 22,000 shares of Common Stock to Mason N. Carter,
Chairman, President and Chief Executive Officer of the Company, at a price of
$11.60 per share, which approximated the average closing price of the Company's
Common Stock during the first quarter of 1998. The Company lent Mr. Carter
$255,000 in connection with the purchase of these shares and combined that loan
with a prior loan to Mr. Carter in the amount of $105,000. The resulting total
principal amount of $360,000 was payable May 4, 2003 and bore interest at a
variable interest rate based on the prime rate of the Company's lending bank.
This loan was further amended on July 29, 2002. Accrued interest of $40,000 was
added to the principal, bringing the new principal amount of the loan to
$400,000, the due date was extended to May 4, 2006, and interest (at the same
rate as was previously applicable) is now payable monthly. Mr. Carter has
pledged 33,000 shares of Common Stock as security for this loan, which is a
full-recourse loan.



                                       15



On August 31, 2000, in connection with an amendment to Mr. Carter's employment
agreement, the Company loaned Mr. Carter an additional $280,000. Interest on the
loan varies and is based on the prime rate of the Company's lending bank,
payable in accordance with Mr. Carter's employment agreement. Each year the
Company is required to forgive 20% of the amount due under this loan and the
accrued interest thereon. During 2003, the Company forgave $56,000 of principal
and $7,000 of accrued interest and paid a tax gross-up benefit of $8,300. During
2004, the Company forgave $56,000 of principal and $4,500 of accrued interest
and estimates that $56,000 of principal and $3,000 of accrued interest will be
forgiven in fiscal year 2005.

During the third quarter and first nine months of 2004, the Company's outside
general counsel KMZ Rosenman was paid $59,000 and $211,000, respectively, for
providing legal services to the Company. During the third quarter and first nine
months of 2003, KMZ Rosenman was paid $46,000 and $203,000, respectively. A
director of the Company is counsel to KMZ Rosenman but does not share in the
fees that the Company pays to such law firm and his compensation is not based on
such fees.

During 2004 and 2003 the Company retained Career Consultants, Inc. and SK
Associates to perform executive searches and to provide other services to the
Company. The Company paid an aggregate of $1,000 and $18,000 to these companies
during the third quarter and first nine months of 2004, respectively. The
Company paid an aggregate of $29,000 to these companies during the first nine
months of 2003. A director of the Company is the chairman and chief executive
officer of these companies.

During the first nine months of 2003, a director of the Company was paid $12,000
for providing financial-related consulting services to the Company. This
agreement terminated in April 2003.

During the third quarter and first nine months of 2004, a director of the
Company was paid $9,000 and $27,000, respectively, for providing
technology-related consulting services to the Company. For the third quarter and
first nine months of 2003, such director was paid $9,000 and $27,000,
respectively.

During the third quarter and first nine months of 2004, DuPont Electronic
Technologies ("DuPont"), a stockholder and the employer of a director, was paid
$9,000 and $66,000, respectively, for providing technological and
marketing-related personnel and services on a cost-sharing basis to the Company
under the Technology Agreement dated February 28, 2002. During the third quarter
and first nine months of 2003, DuPont was paid $25,000 and $75,000,
respectively.

Each director who is not an employee of the Company receives a monthly
director's fee of $1,500, plus an additional $500 for each meeting of the Board
and of any Committees of the Board attended. Beginning in fiscal year 2004, the
Chair of the Audit Committee receives an annual fee of $2,500 for his services
in such capacity. The directors are also reimbursed for reasonable travel
expenses incurred in attending Board and Committee meetings. In addition,
pursuant to the 2001 Stock Option Plan, each non-employee director is granted an
immediately exercisable option to purchase 2,500 shares of the Common Stock of
the Company on the date of each Annual Meeting of Stockholders. Each such grant
is at the fair market value on the date of such grant and will expire on the
tenth anniversary of the date of the grant. On June 17, 2004, non-qualified
stock options to purchase an aggregate of 20,000 shares were issued to eight
directors at an exercise price of $9.01 per share.

Infineon Technologies AG ("Infineon") and DuPont hold registration rights which
currently give them the right to register an aggregate of 1,003,413 shares of
Common Stock of the Company.

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-QSB contains statements relating to future
results of Merrimac Industries, Inc. ("Merrimac" and together with its
subsidiaries, the "Company"), including certain projections and business trends,
that are "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
projected as a result of certain risks and uncertainties. These risks and
uncertainties include, but are not limited to: risks associated with demand for
and market acceptance of existing and newly developed products as to which the
Company has made significant investments, particularly its Multi-Mix(R)
products; general economic and industry conditions; slower than anticipated
penetration into the satellite communications, defense and wireless markets; the
risk that the benefits expected from the acquisition of Filtran Microcircuits
Inc. are not realized; the ability to protect proprietary information and
technology; competitive products and pricing pressures; risks relating to
governmental regulatory actions in communications and defense programs; and
inventory risks due to technological innovation and product obsolescence, as
well as other risks and uncertainties, including but not limited to those
detailed from time to time in Merrimac's Securities and Exchange Commission
filings. These forward-looking



                                       16



statements are made only as of the date of the filing of this Form 10-QSB, and
Merrimac undertakes no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or otherwise.

ITEM 3. CONTROLS AND PROCEDURES

As of October 2, 2004 (the end of the period covered by this report), the
Company's management carried out an evaluation, with the participation of the
Company's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the Company's disclosure controls and procedures. Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective,
as of and for the period covered by this report, in timely alerting them to
material information relating to the Company (including the Company's
consolidated subsidiaries) required to be included in periodic reports filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

In designing and evaluating the Company's disclosure controls and procedures (as
defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act), management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurances of achieving the desired
control objectives, as ours are designed to do, and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures. We believe that our disclosure controls and
procedures provide such reasonable assurance.

No change occurred in the Company's internal controls concerning financial
reporting during the Company's third quarter that has materially affected, or is
reasonably likely to materially affect, the Company's internal controls over
financial reporting.


PART II OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibits:

EXHIBIT
NUMBER                        DESCRIPTION OF EXHIBIT
------                        ----------------------

3(a)              Certificate of Incorporation of Merrimac is hereby
                  incorporated by reference to Exhibit 3(i)(b) to Post-Effective
                  Amendment No. 2 to the Registration Statement on Form S-8 (No.
                  33-68862) of Merrimac dated February 23, 2001.

3(b)              By-laws of Merrimac are hereby incorporated by reference to
                  Exhibit 3(ii)(b) to Post-Effective Amendment No. 2 to the
                  Registration Statement on Form S-8 (No. 33-68862) of Merrimac
                  dated February 23, 2001.

4(a)              Stockholder Rights Agreement dated as of March 9, 1999,
                  between Merrimac and ChaseMellon Stockholder Services, L.L.C.,
                  as Rights Agent, is hereby incorporated by reference to
                  Exhibit 1 to Merrimac's Current Report on Form 8-K filed with
                  the Securities and Exchange Commission on March 9, 1999.

4(b)              Amendment No. 1 dated as of June 9, 1999, to the Stockholder
                  Rights Agreement dated as of March 9, 1999, between Merrimac
                  and ChaseMellon Stockholder Services, L.L.C., as Rights Agent,
                  is hereby incorporated by reference to Exhibit 1 to Merrimac's
                  Current Report on Form 8-K filed with the Securities and
                  Exchange Commission on June 9, 1999.

4(c)              Amendment No. 2 dated as of April 7, 2000, to the Stockholder
                  Rights Agreement dated as of March 9, 1999, between Merrimac
                  and ChaseMellon Stockholder Services, L.L.C., as Rights Agent,
                  is hereby incorporated by reference to Exhibit 1(b) to
                  Merrimac's Current Report on Form 8-K filed with the
                  Securities and Exchange Commission on April 10, 2000.

4(d)              Amendment No. 3 dated as of October 26, 2000, to the
                  Stockholder Rights Agreement dated as of March 9, 1999,
                  between Merrimac and ChaseMellon Stockholder Services, L.L.C.,
                  as Rights Agent, is hereby incorporated by reference to
                  Exhibit 2 to Merrimac's Current Report on Form 8-K filed with
                  the Securities and Exchange Commission on October 27, 2000.

4(e)              Amendment No. 4 dated as of February 21, 2001, to the
                  Stockholder Rights Agreement dated as of March 9, 1999,
                  between Merrimac and Mellon Investor



                                       17



                  Services, L.L.C. (formerly known as ChaseMellon Stockholder
                  Services, L.L.C.), as Rights Agent, is hereby incorporated by
                  reference to Exhibit 1(d) to Merrimac's Current Report on Form
                  8-K filed with the Securities and Exchange Commission on
                  February 21, 2001.

4(f)              Amendment No. 5, dated February 28, 2002, to the Rights
                  Agreement, between Merrimac and Mellon Investor Services LLC
                  (f.k.a. ChaseMellon Shareholder Services, L.L.C.), as Rights
                  Agent is hereby incorporated by reference to Exhibit 99.4 to
                  Merrimac's Form 8-K filed with the Securities and Exchange
                  Commission on March 6, 2002.

4(g)              Amendment No. 6, dated September 18, 2002, to the Rights
                  Agreement, between Merrimac and Mellon Investor Services LLC,
                  as Rights Agent is hereby incorporated by reference to Exhibit
                  99.3 to Merrimac's Form 8-K filed with the Securities and
                  Exchange Commission on October 10, 2002.

10(a)             Stock Purchase and Exclusivity Letter Agreement dated April 7,
                  2000, among Ericsson Microelectronics, A.B., Ericsson Holdings
                  International, B.V. and Merrimac is hereby incorporated by
                  reference to Exhibit 10(a) to Merrimac's Quarterly Report on
                  Form 10-QSB for the period ending July 1, 2000.

10(b)             Letter Agreement, dated February 1, 2002, among Merrimac,
                  Ericsson Holding International B.V. and Ericsson
                  Microelectronics, A.B., which amends the Stock Purchase and
                  Exclusivity Letter, dated April 7, 2000 is hereby incorporated
                  by reference to Exhibit 99.4 to Merrimac's Form 8-K filed with
                  the Securities and Exchange Commission on October 10, 2002.

10(c)             Registration Rights Agreement dated as of April 7, 2000,
                  between Merrimac and Ericsson Holding International, B.V. is
                  hereby incorporated by reference to Exhibit 10(b) to
                  Merrimac's Quarterly Report on Form 10-QSB for the period
                  ending July 1, 2000.

10(d)             Subscription Agreement for Common Stock and Warrants dated
                  October 26, 2000, between Merrimac and Ericsson Holding
                  International, B.V. (with a form of Warrant attached) is
                  hereby incorporated by reference to Exhibit 10(t) to
                  Merrimac's Annual Report on Form 10-KSB for the year ending
                  December 30, 2000.

10(e)             Registration Rights Agreement dated October 26, 2000, between
                  Merrimac and Ericsson Holding International, B.V. is hereby
                  incorporated by reference to Exhibit 10(u) to Merrimac's
                  Annual Report on Form 10-KSB dated for the year ending
                  December 30, 2000.

10(f)             Subscription Agreement for Common Stock and Warrants dated
                  October 26, 2000, between Merrimac and certain entities and
                  individuals related to Adam Smith Investment Partners, L.P.
                  (with a form of Warrant attached) is hereby incorporated by
                  reference to Exhibit 10(v) to Merrimac's Annual Report on Form
                  10-KSB for the year ending December 30, 2000.

10(g)             Registration Rights Agreement dated October 26, 2000, between
                  Merrimac and certain entities and individuals related to Adam
                  Smith Investment Partners, L.P. is hereby incorporated by
                  reference to Exhibit 10(w) to Merrimac's Annual Report on Form
                  10-KSB for the year ending December 30, 2000.

10(h)             Subscription Agreement for Common Stock and Warrants dated
                  October 26, 2000, among Merrimac, Edward H. Cohen, Joseph B.
                  Fuller and Joel H. Goldberg (with a form of Warrant attached)
                  is hereby incorporated by reference to Exhibit 10(x) to
                  Merrimac's Annual Report on Form 10-KSB for the year ending
                  December 30, 2000.

10(i)             Subscription Agreement, dated February 28, 2002 between
                  Merrimac and DuPont Chemical and Energy Operations, Inc., a
                  subsidiary of E.I. DuPont de Nemours and Company is hereby
                  incorporated by reference to Exhibit 99.2 to Merrimac's Form
                  8-K filed with the Securities and Exchange Commission on March
                  6, 2002.

10(j)             Registration Rights Agreement, dated February 28, 2002 between
                  Merrimac and DuPont Chemical and Energy Operations, Inc., a
                  subsidiary of E.I. DuPont de Nemours and Company is hereby
                  incorporated by reference to Exhibit 99.3 to Merrimac's Form
                  8-K filed with the Securities and Exchange Commission on March
                  6, 2002.

10(k)             Consent and Waiver, dated as of September 18, 2002, among
                  Merrimac, Ericsson



                                       18



                  Holding International B.V. and Infineon Technologies AG is
                  hereby incorporated by reference to Exhibit 99.1 to Merrimac's
                  Form 8-K filed with the Securities and Exchange Commission on
                  October 10, 2002.

10(l)             Modification Agreement, dated as of September 27, 2002,
                  between Merrimac and Infineon Technologies AG is hereby
                  incorporated by reference to Exhibit 99.2 to Merrimac's Form
                  8-K filed with the Securities and Exchange Commission on
                  October 10, 2002.

10(m)             Profit Sharing Plan of Merrimac is hereby incorporated by
                  reference to Exhibit 10(n) to Merrimac's Registration
                  Statement on Form S-1 (No. 2-79455).*

10(n)             1983 Key Employees Stock Option Plan of Merrimac effective
                  March 21, 1983, is hereby incorporated by reference to Exhibit
                  10(m) to Merrimac's Annual Report on Form 10-KSB for the year
                  ending March 31, 1983.*

10(o)             1993 Stock Option Plan of Merrimac effective March 31, 1993,
                  is hereby incorporated by reference to Exhibit 4(c) to
                  Merrimac's Registration Statement on Form S-8 (No. 33-68862)
                  dated September 14, 1993.*

10(p)             1997 Long-Term Incentive Plan of Merrimac is hereby
                  incorporated by reference to Exhibit A to Merrimac's Proxy
                  Statement filed with the Securities and Exchange Commission on
                  April 11, 1997.*

10(q)             Resolutions of the Stock Option Committee of the Board of
                  Directors of Merrimac adopted June 3, 1998, amending the 1983
                  Key Employees Stock Option Plan of Merrimac, the 1993 Stock
                  Option Plan of Merrimac and the 1997 Long-Term Incentive Plan
                  of Merrimac and adjusting outstanding awards thereunder to
                  give effect to Merrimac's 10% stock dividend paid June 5,
                  1998, are hereby incorporated by reference to Exhibit 10(f) to
                  Merrimac's Annual Report on Form 10-KSB for the year ending
                  March 30, 1999.*

10(r)             1995 Stock Purchase Plan of Merrimac is hereby incorporated by
                  reference to Exhibit A to Merrimac's Proxy Statement filed
                  with the Securities and Exchange Commission on March 27,
                  1995.*

10(s)             Resolutions of the Stock Purchase Plan Committee of the Board
                  of Directors of Merrimac adopted June 3, 1998, amending the
                  1995 Stock Purchase Plan of Merrimac and adjusting outstanding
                  awards thereunder to give effect to Merrimac's 10% stock
                  dividend paid June 5, 1998, are hereby incorporated by
                  reference to Exhibit 10(g)(2) to Merrimac's Annual Report on
                  Form 10-KSB for the year ending January 2, 1999.*

10(t)             1996 Stock Option Plan for Non-Employee Directors of Merrimac
                  is hereby incorporated by reference to Exhibit 10(d) to
                  Merrimac's Annual Report on Form 10-KSB dated for the year
                  ending December 28, 1996.*

10(u)             Resolutions of the Board of Directors of Merrimac, adopted
                  June 3, 1998, amending the 1996 Stock Option Plan for
                  Non-Employee Directors of Merrimac and adjusting outstanding
                  awards thereunder to give effect to Merrimac's 10% stock
                  dividend paid June 5, 1998, are hereby incorporated by
                  reference to Exhibit 10(h)(2)to Merrimac's Annual Report on
                  Form 10-KSB for the year ending January 2, 1999.*

10(v)             Amended and Restated Employment Agreement dated as of January
                  1, 1998, between Merrimac and Mason N. Carter is hereby
                  incorporated by reference to Exhibit 10(a) to Merrimac's
                  Quarterly Report on Form 10-QSB for the period ending July 4,
                  1998.*

10(w)             Amendment dated August 31, 2000 to the Amended and Restated
                  Employment Agreement dated January 1, 1998, between Merrimac
                  and Mason N. Carter is hereby incorporated by reference to
                  Exhibit 10(a) to Merrimac's Quarterly Report on Form 10-QSB
                  for the period ending September 30, 2000.*

10(x)             Amended and Restated Pledge Agreement dated as of May 4, 1998,
                  between Merrimac and Mason N. Carter is hereby incorporated by
                  reference to Exhibit 10(c) to Merrimac's Quarterly Report on
                  Form 10-QSB for the period ending July 4, 1998.*

10(y)             Amended Promissory Note dated as of May 4, 1998, executed by
                  Mason N. Carter in favor of Merrimac is hereby incorporated by
                  reference to Exhibit 10(l) to Merrimac's Annual Report on Form
                  10-KSB for the year ending January 2, 1999.*



                                       19



10(z)             Registration Rights Agreement dated as of May 4, 1998, between
                  Merrimac and Mason N. Carter is hereby incorporated by
                  reference to Exhibit 10(e) to Merrimac's Quarterly Report on
                  Form 10-QSB for the period ending July 4, 1998.*

10(aa)            Consulting Agreement dated as of January 1, 1998, between
                  Merrimac and Arthur A. Oliner is hereby incorporated by
                  reference to Exhibit 10 to Merrimac's Quarterly Report on Form
                  10-QSB for the period ending April 4, 1998.*

10(bb)            Separation Agreement dated as of December 31, 1998, between
                  Merrimac and Eugene W. Niemiec is hereby incorporated by
                  reference to Exhibit 10(p) to Merrimac's Annual Report on Form
                  10-KSB for the year ending January 2, 1999.*

10(cc)            Stockholder's Agreement dated as of October 30, 1998, between
                  Merrimac and Charles F. Huber II is hereby incorporated by
                  reference to Exhibit 10 to Merrimac's Quarterly Report on Form
                  10-QSB for the period ending October 3, 1998.

10(dd)            Shareholder's Agreement dated as of June 3, 1999, among
                  Merrimac, William D. Witter, Inc. and William D. Witter is
                  hereby incorporated by reference to Exhibit 10 to Merrimac's
                  Quarterly Report on Form 10-QSB for the period ending July 3,
                  1999.

10(ee)            2001 Key Employee Incentive Plan is hereby incorporated by
                  reference to Exhibit 4.01 to Merrimac's Form S-8 (No.
                  333-63434) dated June 20, 2001.*

10(ff)            2001 Stock Option Plan is hereby incorporated by reference to
                  Exhibit 4.01 to Merrimac's Form S-8 (No. 333-63436) dated June
                  20, 2001.*

10(gg)            2001 Stock Purchase Plan is hereby incorporated by reference
                  to Exhibit 4.01 to Merrimac's Form S-8 (No. 333-63438) dated
                  June 20, 2001.*

10(hh)            2001 Amended and Restated Stock Option Plan is hereby
                  incorporated by reference to Exhibit 4(i) to Merrimac's
                  Quarterly Report on Form 10-QSB for the period ending June 30,
                  2001.*

10(ii)            Third Amended and Restated Credit Agreement, dated December
                  23, 2002, between Merrimac and Fleet National Bank, which
                  amends the Credit and Security Agreement, dated October 7,
                  1997 is hereby incorporated by reference to Exhibit 10(mm) to
                  Merrimac's Annual Report on Form 10-KSB for the year ending
                  December 28, 2002.

10(jj)            Revolving Loan Modification Agreement, dated April 17, 2003,
                  between Merrimac and Fleet National Bank, which amends the
                  Third Amended and Restated Credit Agreement, dated December
                  23, 2002 is hereby incorporated by reference to Exhibit 10(nn)
                  to Merrimac's Annual Report on Form 10-KSB for the year ending
                  December 28, 2002.

10(kk)            Term Loan and Security Agreement, dated December 23, 2002,
                  between Merrimac and Fleet National Bank is hereby
                  incorporated by reference to Exhibit 10(oo) to Merrimac's
                  Annual Report on Form 10-KSB for the year ending December 28,
                  2002.

10(ll)            Term Loan Modification Agreement, dated April 17, 2003,
                  between Merrimac and Fleet National Bank, which amends the
                  Term Loan and Security Agreement, dated December 23, 2002 is
                  hereby incorporated by reference to Exhibit 10(pp) to
                  Merrimac's Annual Report on Form 10-KSB for the year ending
                  December 28, 2002.

10(mm)            Term Loan and Security Agreement, dated March 26, 2002,
                  between Merrimac and Fleet National Bank is hereby
                  incorporated by reference to Exhibit 10(qq) to Merrimac's
                  Annual Report on Form 10-KSB for the year ending December 28,
                  2002.

10(nn)            Term Loan Modification Agreement, dated April 17, 2003, which
                  amends the Term Loan and Security Agreement, dated March 26,
                  2002 is hereby incorporated by reference to Exhibit 10(rr) to
                  Merrimac's Annual Report on Form 10-KSB for the year ending
                  December 28, 2002.

10(oo)            Financing Agreement, dated October 8, 2003, between Merrimac
                  and The CIT Group/Business Credit, Inc. is hereby incorporated
                  by reference to Exhibit 10(rr) to Merrimac's Form 10-QSB for
                  the period ending September 27, 2003.

10(pp)            Trademark and Patent Security Agreement, dated October 8,
                  2003, between Merrimac



                                       20



                  and The CIT Group/Business Credit, Inc. is hereby incorporated
                  by reference to Exhibit 10(ss) to Merrimac's Form 10-QSB for
                  the period ending September 27, 2003.

10(qq)            Mortgage and Security Agreement, dated October 8, 2003, by
                  Merrimac in favor of The CIT Group/Business Credit, Inc. is
                  hereby incorporated by reference to Exhibit 10(tt) to
                  Merrimac's Form 10-QSB for the period ending September 27,
                  2003.

10(rr)*           Merrimac Severance Plan, as adopted September 17, 2003. is
                  hereby incorporated by reference to Exhibit 10(uu) to
                  Merrimac's Form 10-QSB for the period ending September 27,
                  2003.

31.1+             Chief Executive Officer's Certificate, pursuant to Section 302
                  of the Sarbanes-Oxley Act of 2002.

31.2+             Chief Financial Officer's Certificate, pursuant to Section 302
                  of the Sarbanes-Oxley Act of 2002.

32.1+             Chief Executive Officer's Certificate, pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

32.2+             Chief Financial Officer's Certificate, pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

*    Indicates that exhibit is a management contract or compensatory plan or
     arrangement.

+    Indicates that exhibit is filed as an exhibit hereto.





                                       21




                                   SIGNATURES

In accordance with the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                    MERRIMAC INDUSTRIES, INC.




Date: November 16, 2004                       By: /s/ Mason N. Carter
                                                  -------------------
                                              Mason N. Carter
                                              Chairman, President and
                                              Chief Executive Officer



Date: November 16, 2004                       By: /s/ Robert V. Condon
                                                  --------------------
                                              Robert V. Condon
                                              Vice President, Finance and
                                              Chief Financial Officer














                                       22`